What is the Marketing-Finance Interface?

In this JM, Mike Hanssens and Koen Pauwels provide an excellent overview of challenges in relating marketing metrics to performance. Marketing metrics are indeed tricky to relate to each other in first place. Take for instance advertising. Does it lead to awareness? Probably yes. Does it lead to better brand impressions? Or purchase attitudes? Even when such relationships are established, do these metrics lead to more money for the company? Especially when money is already spent (sunk costs of advertising).
To tackle this, the authors argue that marketers needs to establish consistent objectives, balance budget allocations, communicate with the finance department, collect correct data and apply the right method. But even after that, can the value of marketing be demonstrated? Won't spoil you the read. Find it for yourselves :) 

In this all time great piece, Vikas Mittal Eugene Anderson , Akin Sayrak and Pandu Tadikamalla, pick up the discussion in Rust et al 2002 and investigate whether customer satisfaction is good for all firms. 

The dilemma is typically which one is better: do you want to spend money on making your customers happy or do you want to focus on reducing the costs of production? Achieving both is practically and theoretically difficult as firm resources are limited. Should the firms pick one? For most firms, the answer can be yes. However, there are a few firms that can achieve the dual emphasis and, as the authors show, have a positive impact on long term financial value. Find the rest yourselves in the articles listed below.  #marketing #customersatisfaction #revenue #costs 

Link to Rust et al 2002 article

This one has started it all for me. 

I came across the article by Andrew Stephen and Jeff Galak in early 2013 and it inspired me to work on social media. 

In this article, the authors pave the way for social media research by showing how owned and earned media affect sales of a micro-lending practice, Kiva. They use state of the art data and method and provide very useful implications. The result: while traditional earned media (i.e. a journalist writing a piece about your brand in a newspaper) is more powerful, the more highly frequent earned social media (i.e. blog posts or social media posts about you) has a better impact on sales in the long-term.
#socialmedia, #earnedmedia, #returnoninvestment 

This one is a classic of the marketing- finance interface. Did you know that such an interface exists? Well, it does and the authors, Shuba Srinivasan and Mike Hanssens overview it for you. The argument is simple: marketing is important but comes with a cost. So marketing investments need to be justified. Which is the best way to justify investments? To show that marketing leads to measures of shareholder value. This is an overly simplified argument of course, so if you want a more rigorous one-> read the article which set the scene for the marketing-finance interface of the last decade.
#marketing, #finance, #marketingfinance, #overview, #research